STATE OF ODISHA & ORS. versus M/S PANDA INFRAPROJECT LIMITED

Citation: [2022] 2 S.C.R. 183 · Decided: 24-02-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Disposed off

cites 3 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
183
STATE OF ODISHA & ORS.
v.
M/S PANDA INFRAPROJECT LIMITED
(Civil Appeal No. 1083 of 2022)
FEBRUARY 24, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Administrative Law: Government contracts – Blacklisting of
contractor – Principle of natural justice – Judicial review –
Respondent was awarded contract to construct a flyover over the
railway level crossing – Post construction, a ten meter slab of flyover
collapsed which resulted in loss of life and property – A high level
inquiry was conducted which submitted a comprehensive report and
found respondent guilty – On the basis of such report, state
government issued a show cause notice to respondent and on
considering its reply thereto, permanently banned it from
participating or bidding for any work to be undertaken by the
government – Respondent filed writ petition before High Court –
High Court set aside the order of blacklisting on the ground of
violation of principles of natural justice – On appeal, held:
Blacklisting order was passed after considering the allegations in
the show cause notice, considering the reply and also by considering
the material available on record and after following the procedure
as per the Orissa Public Works Department Code – Thus, decision
of state government of blacklisting the respondent was not in breach
of principles of natural justice – “Debarment” is recognised and
often used as an effective method for disciplining deviant suppliers/
contractors who may have committed acts of omission and
commission – It is for the State or appropriate authority to pass an
order of blacklisting/debarment in the facts and circumstances of
the case – It was specifically found that the safety arrangements
were lacking severely in the construction work zone and quality
assurance was not emphasised as stipulated in the codes – High
Court erred and exceeded its jurisdiction in exercise of powers under
Art.226 of the Constitution of India in setting aside the blacklisting
order, that too, without adverting to the serious allegations and the
act of omission and commission on the part of the contractor which
led to a serious incident of collapse of ten meter slab while concrete
[2022] 2 S.C.R. 183
183
A
B
C
D
E
F
G
H
184
SUPREME COURT REPORTS
[2022] 2 S.C.R.
work of the deck was going on and due to which one person died
and eleven others were injured – However, to debar him permanently
can be said to be too harsh a punishment – Blacklisting restricted
to five years.
Disposing of the appeals, the Court
HELD: 1. A detailed show cause notice was issued with
specific allegations to which the respondent-contractor submitted
a detailed reply. After considering the allegations in the show
cause notice, considering the reply and also by considering the
material available on record the order of blacklisting was passed.
[Para 8.3][192-D]
2. As per the law laid down by this Court in a catena of
decisions “debarment” is recognised and often used as an
effective method for disciplining deviant suppliers/contractors
who may have committed acts of omission and commission. It is
for the State or appropriate authority to pass an order of
blacklisting/debarment in the facts and circumstances of the case.
Therefore, the High Court has erred and has exceeded its
jurisdiction in exercise of powers under Article 226 of the
Constitution of India by quashing and setting aside the blacklisting
order, that too, without adverting to the serious allegations and
the act of omission and commission on the part of the contractor
which led to a serious incident of collapse of ten meter slab while
concrete work of the deck was going on and due to which one
person died and eleven others were injured. It was specifically
found that the safety arrangements were lacking severely in the
construction work zone. It was also found that quality assurance
was not emphasised as stipulated in the codes and manuals and
as per the Agreement. Therefore, the High Court ought to have
considered the seriousness of the incident in which due to
omission and commission on the part of the contractor in
constructing the flyover one person died and eleven others were
injured. [Para 8.7][193-C-F]
3. In the instant case, it might be true that the offence was
the first offence committed by the contractor. However,
considering the seriousness of the matter that due to the omission
A
B
C
D
E
F
G
H
185
and commission on the part of the contractor a serious incident
had occurred as there was a collapse of 

Excerpt shown. Read the full judgment & AI analysis in Lexace.